Lionel Shriver

This £50 billion EU ‘divorce bill’ is more like a ransom

2 December 2017

9:00 AM

2 December 2017

9:00 AM

A  ‘bill’ is not commonly subject to negotiation. It arrives after a customer has contracted for the purchase of goods or services, whose price — with the unique exception of American health care bills, which are more like muggings by gangs on mopeds — has been established in advance. For the average upstanding Briton, a bill is not a starting point, subject to haggling. It is something you pay.

The Lisbon Treaty’s Article 50 makes no mention of paying financial liabilities in order to leave the EU. Once the post–referendum conversation turned immediately to the ‘divorce bill’, the May government’s big mistake from the off was bickering about its size. A better opening strategy would run not ‘How much?’ but ‘What divorce bill?’

First of all, we’re not talking about a marriage, but a membership. The mistaken conflation of a highly emotive institution with a prosaic subscription is germane. The dissolution of a marriage can be fraught, and entails a division of assets often unfair, taking little or no consideration of what income each party has contributed to the relationship. In the UK, many a rightly outraged spouse has seen an under-accomplished ex walk off with half the spoils of his or her successful career — which sets an ominous precedent here.

The cancellation of a membership is more straightforward. You no longer enjoy the benefits of the association; you no longer have to obey the rules of the organisation or pay its dues.

Fiscally, that is straightforward: the UK obviously continues to pay its EU contributions while still a member. Should a further transition period involve UK participation in the single market and customs union beyond the spring of 2018, the UK should clearly pay its dues for such a de facto membership. It is also sensible and just for the UK to assume the pension obligations of its own former EU employees — and only 4 per cent of EU staff are UK nationals.

Beyond that, the ‘divorce bill’ is baloney. The very fact that the amounts under discussion have been bouncing around from €20 billion to €100 billion exposes the arbitrary, snatched-from-the-air character of this apocryphal ‘bill’. It’s baldly apparent to the British public that these figures are made up, and that EU leaders are chancing their arms. Unfortunately, Barnier and co have been working with the British for long enough to understand their quarry.

The UK should feel under no obligation to finance a chunk of EU pension obligations beyond those of its own nationals. Further, this notion that the UK has made ‘commitments’ to a host of projects it is now compelled to finance to their completion — until at least 2023 — is rubbish. Commitments can be rescinded. Individuals, companies and governments alike withdraw support for projects all the time. (Perhaps the most egregious example of pro forma reneging on promises is the way ‘pledges’ for disaster relief go routinely unmet once governments have reaped credit for their lofty intentions.) Circumstances change. Like: we made that commitment when we were part of the club. If you quit membership of a tennis club that’s voted to build a new court, you don’t keep getting bills for a court you’ll never play on.

But then, the UK doesn’t aim to cover a ‘bill’. In seeming open to an ever-larger exit payment, team Britannia hopes to buy a trade deal — thereby paying more like a bribe or a ransom. Which is why there is all the squabbling over timing. Where kidnappings traditionally go awry is in the delivery of the payoff. Once the baddies have the funds, more often than not you find the hostage by the side of the road with a slit throat.

Theresa May has already made a concession too far by guaranteeing that none of the other 27 countries in the EU will be so much as 10p out of pocket by the end of the financial period ending in 2020. If anything, such generosity only whets the EU appetite for more. Anyone who’s bought a scarf in a Middle Eastern souk knows that you begin with a lowball bid. And EU negotiators are fearsomely motivated to squeeze the UK, which currently supplies 15 per cent of the EU budget, for every sou they can get.

Since the referendum, the incessant EU focus on how much money the bloc can bully out of Britain has made for an ugly spectacle of greed and desperation. European leaders are making up the rules on the hoof, to the UK’s dramatic disadvantage. In so doing, they make a mockery of the morass of niggling treaties, laws and regulations in which the membership is strangling. They display no gratitude for the UK’s ever-escalating net contribution to EU coffers for all but a single year (1975, negative by a hair). They are taking advantage not only of the UK’s resources — if Romania left the EU, the country wouldn’t get an invoice, but a gold watch — but also of the British nature, which places a premium on fairness and rectitude. They’re aware that the standard British impulse on being presented with any ‘bill’ is to pay it.

A Norway option might be on the table; at least that way the EU could get its mitts on British money. But if the UK truly leave-leaves, I’m doubtful the EU has the slightest intention of delivering a trade deal any more generous than it has with the US or China. While the government may be emptying the piggy banks on to the bedspread in order to amass a ransom or a bribe, in the end the demand will in all likelihood revert to a ‘bill’.

As May is apt to get little in return, she should watch the numbers she throws around. For the other national trait that marks the British as suckers is probity. Should the PM already have conceded that the UK ‘owes’ the EU X billion euros — regardless of what uncompromisingly hostile terms of departure we’re offered — she’ll still send the cheque.

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